Statement of the Hon. Joe Knollenberg, a Representative of Congress from the State of Michigan

Mr. Chairman, I applaud the committee for holding this hearing as Congress continues to work with the Bush Administration to modernize and improve the Medicare system.  As Congress addresses the issue of broad Medicare reform, it is essential to consider the impact of reducing Medicare payments to physicians.  After all, physicians and other health care professionals are critical components of the Medicare system, serving on the front lines to provide quality health care to all Americans.

I commend the efforts made already by many Congressional Members and the Bush Administration to implement administrative reforms to make the Medicare program work better for physicians.  Programs such as the Physicians’ Open Door Initiative and the Physicians Issues Project have helped improve the flow of information, reduce regulatory burdens and ease paperwork requirements.  As a result, doctors will be able to spend more of their time providing health care and less of their time wading through pages of rules and regulations.  It is my hope that we will build on these improvements.

I appreciate the opportunity today to raise concerns expressed by many doctors in my home district in southeastern Michigan.  I believe these issues have been echoed by health providers throughout the country as well.  My constituents have brought to my attention the devastating consequences of the final payment policies and payment rates for 2002 under the Medicare Physician Fee Schedule announced by CMS on November 1, 2001.  Reducing Medicare’s physician payments by 5.4% would significantly restrict their ability to provide the necessary services to our seniors.

In addition to physicians being discouraged by the enormous amount of federally required paperwork, our area has seen a significant decrease in the number of physicians financially able to care for Medicare beneficiaries, subsequently closing their practice to them.  Moreover, some doctors are simply leaving medicine altogether because of the financial impossibility of providing services under Medicare.

Emergency physicians will be particularly adversely affected given payment cuts in other areas.  The role of emergency departments is becoming even more important as our country prepares to respond to bioterrorism and it is essential that their physicians be able to effectively carry out their responsibilities.

A Medicare payment cut could also effect the entire health sector as numerous private sector plans and state Medicaid programs tie their physician fee schedules to Medicare rates.  At a time when we are concerned with healthcare workforce shortages, we must identify strategies to increase recruitment, retention and development of qualified health care providers.  I look forward to working with the Committee and the rest of my colleagues and the Bush Administration to enact comprehensive Medicare reform that will include strengthening the Medicare payment system.